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During the UK’s election campaign, both the Conservatives and Labour have been sticking to well-worn lines on Brexit. The Conservative manifesto is studded with references to seizing Brexit freedoms to repeal or reform unspecified EU regulations, and baseless claims that Brexit has enabled the UK to do things like build more housing. Labour’s manifesto calls for “an improved and ambitious relationship with our European partners”, but the specifics are rather unambitious.
Whoever wins the election – and it seems almost certain to be Labour – will have to think about reshaping the UK’s relationship with the EU, in the interests of the UK’s prosperity and security. Four years after Brexit, the EU is still the UK’s largest trading partner, and Putin’s invasion of Ukraine has underlined that Euro-Atlantic security remains critical for the UK.
Whoever wins the election will have to think about reshaping the UK’s relationship with the EU, in the interests of the UK’s prosperity and security.
Tweet thisThe UK’s approach to relations with the EU will need to take account not only of what Britain wants, but also of what its EU partners are willing to contemplate. The EU institutions and the member-states would generally welcome better relations with the UK. However, improving relations with London will not be a top priority: EU leaders will be focused on internal priorities like implementing the Green deal and preparations for the next seven-year budget starting in 2028. Putin’s war on Ukraine, metastasising conflicts in the Middle East and (potentially) a Trump presidency in the US will also take up much of the Union’s attention.
In the following sections CER experts assess the choices that the incoming British government will face on Europe in different areas, from trade and regulatory co-operation, to migration, foreign policy, defence, and climate policy.
From the EU’s perspective, the trade relationship with the UK has been settled through the Windsor Framework for Northern Ireland and the Trade and Co-operation Agreement (TCA) for broader trade questions. The challenge for the next British government is that this set of solutions is hardly satisfactory for British businesses: they face reduced market access and increased costs of trading compared with when the UK was an EU member. Neither exporting manufacturers nor importers have fully adjusted to a post-Brexit reality of increased trade friction, in part because the UK is only now introducing many border checks for imports. The next British government will face intense pressure to improve the TCA to reduce costs and secure as much market access as possible.
In this respect, a Labour government is likely to disappoint many. Labour’s three red lines – no customs union, no single market membership and no freedom of movement – will limit the potential improvements. In particular, the prospects for improving market access for services while respecting the red lines are very limited. There will be border checks as long as there is a customs border. There will therefore be no return to the frictionless trade that existed pre-Brexit.
On the positive side, Labour have promised to seek improvements in three areas: recognition of professional qualifications, visa exemptions for touring performers and a veterinary agreement. Mutual recognition of qualifications will likely prove difficult to achieve, except perhaps for limited deals for specific professions, since the pre-Brexit system of broader mutual recognition was directly tied to freedom of movement. Similarly, a visa exemption agreement could help British performers touring in some EU countries (though many do not require visas or work permits anyway) but will not affect customs costs for transporting instruments or stage equipment.
The most significant of Labour’s promises is the proposed veterinary agreement, which could reduce or even eliminate expensive sanitary border checks on food products, to the benefit of both exporters and consumers. Elimination of border checks would, however, require the UK to accept dynamic alignment with EU regulation and a role for the European Court of Justice. If the UK accepts such an arrangement, there will be pressure for it to accept similar arrangements for other types of goods. Rachel Reeves, the shadow chancellor, has already hinted the list of improvements is not exhaustive, saying “I don’t think anyone voted Leave because they were not happy that chemicals regulations were the same across Europe.”
For goods and product regulation in general, there are powerful incentives for some type of UK dynamic alignment with the EU, even at the expense of becoming a rule-taker. The UK market is not large enough to sustain a separate set of regulatory requirements for many products and UK exporters would prefer to comply with only one set of rules for both their home market and exports to the EU. Labour would do well to lay out a trade strategy and take the time to conduct stakeholder consultation to have a clear view of industry interests before engaging with the EU. A UK with a coherent strategy and a clear view of the trade-offs required could find an audience in Brussels for a mutually beneficial agreement and with less concern about ‘cherry-picking’ than during the Brexit negotiations. And even in areas where dynamic alignment is unlikely to be an option, such as for services in general, there could still be mutual interest in dialogue and co-operation....
UK-EU regulatory convergence will persist, regardless of who wins the UK election. But a Labour government might seek better political co-ordination on regulation – to help secure some British influence over rule-making in Brussels...
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